Ceteris paribus, for the owner of a sawmill, lumber and the sawdust that go into particle board are
A. Substitutes in production.
B. Unrelated in the sawmill operator's decision.
C. Complements in production; by-products.
D. None of the choices are correct.
Answer: C
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Historically, one of the most common reasons for countries to impose tariffs was
A) to protect their national security. B) to raise revenue for the government. C) to eliminate unemployment. D) to counter inflation. E) None of the above.
Which of the following provides the best explanation of why low-income countries generally remain poor?
A. Their political environment and policies often discourage productive activity and reduce the potential gains from specialization and exchange. B. They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. C. They are poorly endowed with natural resources, which are essential for long-term rapid growth. D. When the average income level is low, workers have little incentive to earn higher incomes.